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pricing, product design, and advertising

The market environment heavily influences corporate decision makeing ability. Discuss the difference in executive decisions concerning pricing, product design, and advertising between a company that exists in a perfectly competitive market and a company that lives in a monopolistic competitive market.

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Market structure is typically modeled along a continuum with monopoly at one extreme and perfect competition at the other. You might imagine a market continuum as follows.

<<Perfect Competition Monopolistic Competition Oligopoly Duopoly Monopoly>>

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It is probably best to start with PERFECT COMPETITION. A perfectly competitive industry is characterized by three things.
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1) There are many firms in the market.

2) Firms produce an identical product.

3) There are no barriers to entry.

PRICE
Because of this we say firms operating in a perfectly competitive ...

Solution Summary

Contrast factors such as pricing, product design, and advertising.

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